Baozun Inc., the Chinese e-commerce solutions firm for brands, raised $110 million in its initial public offering on Thursday.
The Alibaba-backed firm — the investment arm of Alibaba has an 18.2 percent stake — priced its 11 million shares Wednesday night at $10 each, below the planned $12 to $14 range.
The American depository shares rose to a high of $11.28 in early trading. Baozun shares, which trade under the ticker BZUN, closed up 4.4 percent to $10.44, not much higher than its opening price of $10.25. One ADS is the equivalent of three Class A common shares.
Vincent Qiu, chief executive officer of the Shanghai-based firm, said in an interview that it made sense to do the IPO in the U.S. since it has more than 90 clients, many of which are “international brands with a very strong presence here in the States. To be listed here makes other brands more aware of us in this community.”
Baozun, which specializes in Web site design and logistics support, counts Nike, Guess and Häagen Dazs as clients that have a digital presence in the Chinese online market place. The company was founded in 2007.
Qiu said the firm plans to use the the funds raised from the IPO to invest in its capabilities to serve its clients, from sales and marketing to technology and fulfillment. “We also plan to expand into other [geographic] areas, such as Greater China and Southeast Asia,” he said. The core markets for Baozun now is Mainland China and Hong Kong. For the expansion, Qiu didn’t rule out an acquisition or two, although the initial focus will be to try to grow organically.
Alibaba is currently Baozun’s largest single shareholder. Qiu said the two companies also work together in a relationship capacity since Baozun opens storefronts for brands on Alibaba and Tmall. Since Baozun is pitching itself as the go-to firm for brands seeking to do e-commerce in China, it also helps companies who choose to be on other platforms, such as Alibaba’s competitor JD.com. Qiu said, “Everyone understands that and agrees with our strategy for [helping] brands with their e-commerce and omnichannel [presence].”
While there was some contraction in China’s factory sector in May for the third straight month, that isn’t an issue for Qiu. He said, “The online shopping market is the fastest-growing sector in China. For us, there’s lots of space to grow. We do not see any slowdown.”